Stocks in the News — week of April 28, 2014 (May 1st update)



Abercrombie Shares Rise as Activist Investor Makes Headway

(ANF, $38.00, up $1.25 midday)

Abercrombie & Fitch Co. has entered into a settlement agreement with Engaged Capital.  Under the agreement, Abercrombie has nominated four new independent directors to its board.  In exchange, Engaged Capital will withdraw its nomination of directors to the ANF board.

Subscribe now to link to my April 22 comments about Abercrombie’s fundamentals, chart, and my buy/hold/sell recommendation.

* * * * *

Legg Mason Reports 4Q and Full-Year Earnings

(LM, $46.13, down $0.76 midday)

Global asset manager Legg Mason, Inc. reported fourth quarter adjusted earnings per share (EPS) today of $0.86 vs. $0.52 a year ago.

Quarterly revenues rose 1.9% to $681 million, assets under management (AUM) rose 6%, and operating expenses fell 10%.  Net cash inflows for the quarter were $8.3 billion.

Full-year adjusted EPS rose 30.7%.  The company’s full year ended on March 31.

(Scroll down to read yesterday’s comments on Legg Mason, Inc.)

* * * * *

Legg Mason Increases Dividend by 23%

Global asset manager Legg Mason, Inc. (LM) announced a quarterly dividend increase yesterday to $0.16 per share.  The new annual yield is 1.37%.  (04-30-14)

Subscribe now to read my comments about Legg Mason’s fundamentals, chart, and my buy/hold/sell recommendation.

* * * * *

All eight 2013 & 2012 Goodfellow LLC stock portfolios

dramatically outperformed both the S&P 500 and the Dow!

View our outstanding 2013 and 2012 stock portfolio results.  

* * * * *

Goodyear Tire Hurt by Venezuela Currency in First Quarter

(GT, $26.13, down $1.08 in early trading)

Shares of The Goodyear Tire & Rubber Company are down today as first quarter operating earnings per share (EPS) came in at $0.56 vs. $.45 last year, but below the consensus $0.60.  Total EPS reflected a loss of $0.23 due to foreign currency charges in Venezuela, where the company is experiencing labor and economic disruptions.

Revenues were down 8% vs. last year, and also missed estimates.

The quarter was characterized by strong profit increases in Europe & North America, sales disappointments in emerging markets, severe January winter weather in North America, and 850K shares repurchased.

Shareholders who were following my April 1 recommendation to use a stop-loss order at $25.75 were subsequently stopped out this morning.

Subscribe now to read my comments about Goodyear’s fundamentals, chart, and my buy/hold/sell recommendation.

* * * * *

It only costs $25 for a one-week trial subscription to Goodfellow LLC.

All stocks chosen via strict fundamental and technical criteria.

* * * * *

Eaton Shares Blow Off Steam After Good First Quarter Report

(ETN, $71.84, down $2.66 midday)

Eaton Corp. PLC, maker of electrical & hydraulic systems, reported operating earnings up 21% and sales up 3.5% today vs. first quarter 2013.  Earnings were impacted by severe weather in North America, and adverse currency effects.  Net earnings included an acquisition charge of $0.09 per share.  Revenue hit Wall Street’s estimates, and earnings per share (EPS) exceeded estimates by a penny.

ETN shares reached all-time highs in January; now trading sideways for several months between $70.40-$77.80.

Subscribe now to read my comments about Eaton’s fundamentals, chart, and my buy/hold/sell recommendation.

* * * * *

Bank of America Suspends Dividend Increase & Share Buyback 

(BAC, $15.07, up $0.12 in early trading)

Bank of America Corp. has discovered a $4.1 billion error in its Tier 1 capital levels, which caused it to suspend its recently-announced dividend increase, and its plan for a $4 billion share repurchase.  The error is related to some debt issued by Merrill Lynch, which BofA received during the 2009 Merrill Lynch acquisition.

The bank plans to revise and resubmit its capital plan to the Federal Reserve.

While it’s not unusual for a big bank to find errors in their calculations, it is quite embarrassing, and can be damaging to shareholders.  The stock, which has been falling steadily since it peaked at $18.03 on March 21, fell much further to $14.95 on yesterday’s news.

The current expectation is that Bank of America will omit the share buybacks, while striving to keep the dividend increase intact.  If the bank scraps its repurchase plan, projected earnings per share (EPS) growth rates will be revised downward.  Wall Street currently expects EPS to grow 6%, 61%, and 14% in 2014 through 2016.

The stock has fallen to levels last seen in November.  The share price will probably trade between $14.80 – $16.30 for the time being, and could fall farther if more bad news emerges.

If I owned the shares, I would sell put in a sell order at $16.25; and then be prepared to purchase a stock with strong earnings growth and a bullish chart.

Goodfellow LLC Rating:  Sell, Public, Volatile.  (04/29/14)

BAC Chart

BAC data by YCharts

* * * * *

Send questions and comments to

Happy investing!

Crista Huff


Goodfellow LLC

* * * *

Investment Disclaimer Release of Liability: Through use of this website viewing or using you agree to hold and its employees harmless and to completely release and its employees from any and all liability due to any and all loss (monetary or otherwise), damage (monetary or otherwise), or injury (monetary or otherwise) that you may incur. Goodfellow LLC and its employees are not paid by third parties to promote nor disparage any investment.

Recommendations are based on hypothetical situations of what we would do, not advice on what you should do. Neither Goodfellow LLC nor its employees are licensed investment advisors, tax advisors, nor attorneys. Consult with a licensed investment advisor and a tax advisor to determine the suitability of any investment.

The information provided herein is obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness. When information is provided herein from third parties — such as financial news outlets, financial websites, investment firms, or any other source of financial information – the reliability or completeness of such financial information cannot be guaranteed. The information contained on this website is provided for informational purposes only and contains no investment advice or recommendations to buy or sell any specific securities.

This is not an offer or solicitation for any particular trading strategy, or confirmation of any transaction. Statements made on the website are based on the authors’ opinions and based on information available at the time this page was published. The creators are not liable for any errors, omissions or misstatements. Any performance data quoted represents past performance and past performance is not a guarantee of future results.

Investments always have a degree of risk, including the potential risk of the loss of the investor’s entire principal. There is no guarantee against any loss.

* * * *
Goodfellow LLC is a subscription-only stock market website. We strive to identify financially healthy companies in which traders and investors can buy shares and earn dividends and capital gains. See disclaimer for the risks associated with investing in the stock market. See your tax advisor for the tax consequences of investing. See your estate planning attorney to clarify beneficiary and inheritance issues associated with your assets.




Leave a Reply

Your email address will not be published. Required fields are marked *